Energy Jargon Explained

Energy Jargon Explained

Energy jargon explained by Ideal Energy

Availability
The limit of capacity for Maximum Demand. Consumers pay a fee per unit for the capacity they have (i.e. if a site has an Availability of 150 kVa then maximum demand should not exceed that figure at any time).

Base Load Base load is the level below which electricity demand never drops (i.e. A site with a high maximum demand of 750 kVa whose demand never drops below 250 kVa would have a base load of 250 kVa).

CFD (Contracts for Difference) This refers to the contractual arrangements suppliers have with the generators to purchase specific amounts of electricity.

CHP (Combined Heat and Power Unit) Larger sites often choose to generate part or all of their electricity. A CHP unit is an engine which runs on natural gas (a cheaper fuel than electricity) and generates both heat and electricity.

Communications Charges This is the cost passed back to the customer to have their half-hour data meter telephoned each day to have the stored half-hour data down loaded.

Competition Clause In some electricity contracts there is a competition clause. This normally occurs after 12 months of an 18 month contract. What it means is that the client is free to renegotiate the contract after 12 months and the supplier will either match the lowest price or release the client from the contract to take up the lowest offer.

Contract Price Structures (All Inclusive) This indicates a supply offer, which has all delivery charges (DUoS & TUoS) built into the unit rates for the supply of electricity.DUoS (Distribution Use of Systems)
The RECs receive a market average of 20% of the electricity cost for distribution and this cost is paid irrespective of whether they are responsible for supply.

Energy Only This indicates a supply offer wherein the supplier advises of the energy element of the unit rated only. The offer must have the delivery charges (DUoS & TUoS) added on to indicate the full cost of the offer.

Fossil Fuel Levy In England and Wales the Fossil Fuel Levy is set at 0.3%. This levy was introduced to cover the cost of decommissioning the nuclear generating plants. The Scottish equivalent is called the S.R.O. (Scottish Renewable Order) levy which was set at 0.8%.

Generators National Power, Scottish Hydro, Powergen, Scottish Power and Nuclear Electric are the main UK generators. The regulator is however keen to increase competition within generation, and it is expected that most of the RECs will eventually buy capacity to become more vertically integrated.

HHD (Half-hour Data) This is the product of the half-hour data meter. The data is usually made available to end users by way of a spreadsheet. A full years’ half-hour data will be a spreadsheet with 17,520 cells of data.

Half-hour Meters Currently, if you change your supplier to any other than your local REC, you will also be required to change your meter to a half-hour metering system. Since April 1998, code 5 meters have been mandatory for all sites over 100 kVa, and voluntary for sites under 100 kVa. This meter sends your consumption record by telephone or radio every half-hour to a central data bank. The supplier will then access this information from the data bank and bill the client accordingly. In changing over to half-hour metering the original metering charges are dropped and merely the rental charge is to be paid (circa £250 per annum).

kWh (Kilowatt-Hours) Electricity consumption (as opposed to maximum demand) is measured in kilowatt-hours.Load Factor
Measures the relationship between unit consumption and maximum demand and thus the percentage capacity utilisation figure of a site’s power consumption.

Load Management Load Management sites are fairly flexible as to when they use their electricity. This means that they can schedule their production and shift patterns according to the price of pool electricity. Consumers who can load manage are able to significantly reduce their consumption at the three times in the year when the National Grid takes the Triad maximum demand readings which are used to calculate the transmission charges.

Maximum Demand The measure of the highest peak of electricity flow into the site during a half-hour period in the period of a month.

Megawatt 1,000 kilowatts, or 1,000,000 watts. It is used to refer to sites with an average maximum demand exceeding or equal to 1,000 kW in the highest three months of the year. The megawatt market was the first to deregulate: – 1st October 1990.

Meter Operator Any qualifying site which wishes to benefit from contract rates must have appointed a meter operator. This is usually the host REC. It is the function of the meter operator to run the half-hour data meter and collect the data. A meter operator agreement costs between £160.00 & £280.00 per annum.

National Grid The National Grid owns the main transmission systems and is responsible for transmitting the electricity from the generator to the local RECs area. It is paid a market average of 6% for this service. All electricity generated in mainland UK is put into the National Grid before being split into the various REC areas.

OFGEM (Office of Gas and Electricity Markets) OFGEM is regulates the gas and electricity industries in Great Britain. Ofgem is governed by an authority and its powers are provided for under the Gas Act 1986, the Electricity Act 1989 and the Utilities Act 2000. Everything that Ofgem does is designed to promote and protect the interests of gas and electricity customers.

OH (Over a Hundred) A generic label for electricity sites that have demands greater than 100 kW, = Over a Hundred (OH).

Percentage Day This refers to the percentage ratio of electricity used in the daytime against that used in the night. This information is used by suppliers to quickly identify the type of profile.

Power Factor This is a measurement of electricity deflected at the supply point. The industry standard is 0.9 (i.e. 90% efficient). If the power factor drops below this point it can be corrected by the installation of capacitors.

Pricing Model Suppliers have computer systems which, given the correct data in the right format, will automatically generate an offer price.

Reactive Power Charges Electricity that is deflected by electrical motors and is accounted for by the supplier by billing as a separate item. It is possible to install Power Factor Correction Equipment which will eliminate or reduce the reactive power charges.

REC (Regional Electricity Company) Regional Electricity Company.

Second Tier When a site is being supplied by a supplier other than the local REC it has “gone second tier”.

Settlements Agency This is the body that “settles” the distribution of electricity to establish where and to whom the generated load has been distributed to.

STOD (Seasonal Time of Day) This is a unit based supply offer where electricity is supplied at different unit rates according to the time of day the power is taken by the customer. Typically they have different tariffs for Day Night, Summer Day and Winter Day and Winter Peak supply times, generally between 4.00 p.m. and 7.00 p.m. In addition to this they often have an Evening supply period. STODs can have between 4 and 56 different unit rates in them.

Substation Electrical Distribution Point.

Tariff Analysis This is an area where savings can be generated without negotiation. In analysing tariffs one identifies whether charges are being made unnecessarily (i.e. if a site whose maximum demand never exceeds 200 kVa is paying for an availability of 400 kVa the availability should be reduced by 200 kVa. As there is a fixed monthly cost per kVa available this will result in an easily calculable saving).

Tariff Structure Suppliers quote for electricity in numerous different formats. These range from simple one-rated structures (the same price per kW at all times throughout the year) to complex “Seasonal Time of Day” tariffs which are multi-rated. i.e. the price changes three, six or eight times a day.

Therms This is a unit of measurement for gas. 1 therm is equal to 29.3071 kWh.

Transmission Losses (Line Losses) In transmitting electricity from generator to local REC area, some electricity is lost. Specific calculations have to be made by suppliers to determine the level of these losses.

Triad The National Grid takes readings of maximum demands three times a year. The average of the three readings is used by the National Grid to calculate the transmission charges.

Transco This is a company who own and run the UK gas pipe line. All gas shippers pay a charge for the transportation of gas. The cost of transportation of gas will vary depending on your location.

TUoS (Transmission Use of Systems) An average of 6% of the electricity cost is paid to the National Grid to transmit the electricity from the generator to the local suppliers’ area.

UH (Under a Hundred) Under a hundred. A generic label for electricity sites that have maximum demands lower than 100 kW.

Voltage This is the force that causes a current to move through some resistance, in this case, the National Grid. In industry terms, electricity moves round the main grid at a high voltage. When it is stepped down to the level of a smaller grid or an actual site it is regarded as low voltage. Low voltage supply is more expensive because of the costly process of stepping it down from high voltage. A number of larger industrial sites take high voltage direct which means they incur the cost of stepping the voltage down. For this, they subsequently receive a discount from their REC.

Testimonials

Kent International

Ideal Energy came to us in January 2014 with the promise of hopefully saving us on our extremely large gas and electricity invoices and as their service cost us nothing we gave them a try!

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Ideal Energy were the true ROBIN HOODS of the energy world.

Thanks,

Ian Hartford

CEO. Kent International

Kent International

The Brown Cow, Stockport

The gang did a superb job and my wife and I are very pleased with the outcome.

They were very respectful of the property and stopped and answered all our questions.

They definitely were very professional and did a GREAT job. I would HIGHLY recommend them to anybody. And I love the savings I’m getting power from the advice Ideal Energy gave me

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The Brown Cow, Stockport

Great service and saved us over 26% on our current contract prices.

Ian Smythe ( Manager )

Impact

Ideal Energy offer a quick and efficient service and no strings attached, was nice to get some good advice from a straight talking company

Took away the hassle and headache of dealing with suppliers a very efficient service, would recommend Ideal Energy to any business who want a straightforward easy solution to the headache of dealing with energy suppliers.

David Charles, Procurement Manager at Premier Solutions, compared energy suppliers with us and has never looked back.

As a league football club with significant energy needs, we were intrigued by the concept of saving on our energy rates but were being inundated by phone calls from various energy companies with deals that sounded too good to be true. We were impressed with Ideal Energy from the first phone call as they patiently explained the process and benefits of ensuring the best rates for both our gas and electricity rates were secured.

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Ideal Energy has managed to not only save our utility bills but has enabled us to reduce our carbon footprint by securing green energy for the club, Doug Carroll the Managing Director has always had the clubs best interest at heart in his dealings with us.”

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“Ideal Energy and in particular Doug Carroll the Managing Director has been extremely helpful in helping to sort out the complex issues I had with the last company I worked for.

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Capital Training

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Liam Black of Office Supplies UK saved a great deal of money when coming to Ideal Energy for our energy supplier’s comparison service.

Office Supplies UK

“White Lion, Ideal Energy saved me £1970 by switching suppliers earlier on this year, I only wish I had contacted them sooner.”

Jacqui Carter, Landlady of the White Lion, used Ideal Energy for their energy suppliers comparison needs